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Bid rigging in Prasa train deal: Government welcomes contract ruling

Government has welcomed the North Gauteng High Court judgment that set aside a questionable locomotive contract, the ministry of transport has said.

Prasa’s “unlawful” tender for new locomotives was rigged to favour the winning bidder, and Swifambo Rail Leasing, the company that won the R3.5 billion tender in 2013, maintained a “criminal” fronting relationship with the European manufacturer of the trains.

These are some of the damning findings in Judge EJ Francis’s judgment in the Passenger Rail Agency of South Africa’s (Prasa) successful application to have the controversial contract reviewed and set aside.

The High Court in Johannesburg delivered its judgment on Monday following an application brought by then newly-constituted Prasa board in 2015 under the leadership of board chairperson Popo Molefe.

In one of the harshest legal condemnations of a public tender in recent years, the court found that international manufacturing giant General Electric would have won the tender had Prasa’s “corrupt tender process” not been specifically tailored in order to favour Swifambo’s bid.

Minister of Transport Joe Maswanganyi in a statement said he was pleased with the judgment that would have seen Swifambo Rail Agency nab a massive Passenger Rail Agency SA (Prasa) contract.

The contract was awarded to Swifambo in 2013. It became mired in controversy after an exposé by Rapport newspaper which detailed the Afro 4000 locomotives’ unsuitability for local rail lines.

Maswanganyi said the department, as a shareholder in Prasa, was responsible for delivering good governance principles.

Remedial actions

Maswanganyi said that both the 2014/15 Auditor General report and the Public Protector report ‘Derailed’, revealed systematic governance failures. He added that the department was consistent in imploring the Prasa board to go deeper into the “perceived corruption and maladministration at Prasa.”

Maswanganyi said that the department implemented the Public Protector report by ensuring all Prasa contracts above R10m since 2012 were investigated.

He said that former transport minister Dipuo Peters complied and instructed the Prasa board in September 2015 to fully comply with the remedial actions of the Public Protector and to ensure that those irregularities do not recur.

Maswanganyi said, “In dealing with this matter, we directed Prasa to develop a clear scope of work programme and that financial and fiscal prudence be exercised at all times. It could not have been that public funds are misused by corrupt officials and people with self-serving interests”

Maswanganyi further said that government was “committed to deal decisively with fraud and corruption, and will do everything in law to root out these acts of dishonesty and criminality wherever they emerge.”

Swifambo were directed to pay the costs of the court application including the employment of three counsel.

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